The euro's drop to its lowest against the U.S. dollar in almost two years on Thursday may be just the beginning, with some analysts expecting the common currency to fall to levels not seen since 2003.
"The euro is vulnerable to a serious hit," analysts at Barclays said in a note Wednesday. "We now expect a large, multi-year downtrend in the euro, following a substantial deterioration in the euro area's economic outlook and the ECB's (European Central Bank) aggressive response to that deterioration."
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The euro slipped to a 22-month low of $1.2737 on Thursday after ECB President Mario Draghi said in a newspaper interview that he expects the euro zone to grow modestly in the second half of the year, helped by the ECB's recent stimulus steps. He also pledged to do more to help the single currency region should it become necessary.